Chinese leaders scramble to shore up public confidence after rabies vaccine maker was found faking records.

A vaccine scandal in China, which has prompted angry reactions from citizens fed up with safety scares, is sending ripples across the local drug market and threatening Chinese ambitions to play a larger role in the global pharmaceutical space.

Regulators said last week they had halted production of a rabies vaccine made by Changchun Changsheng Life Sciences Ltd, which is based in northeastern China, after finding fabricated records and other problems during an inspection.

By Monday, shares in Chinese vaccine makers and biotech firms had fallen across the board.

Premier Li Keqiang slammed the company late on Sunday for having crossed a moral red line and called for swift action.

"We will resolutely crack down on illegal and criminal acts that endanger the safety of peoples' lives, resolutely punish lawbreakers according to the law, and resolutely and severely criticise dereliction of duty in supervision," Li said in a statement posted on the government's website.

Changsheng has been found to have faked production documents related to a rabies vaccine that is given to babies as young as three months, underscoring the difficulties China faces in cleaning up the image of the world's second-biggest drug industry as it aims to promote its vaccines globally.

While there have been no apparent reports of people being harmed by the vaccine or having contracted rabies after receiving it, the regulator has already ordered Changsheng to halt production and recall all its vaccines.

Extremely sensitive

The scandal has sparked anger on social media and dealt a blow to China's drug regulator.

Changsheng apologised in a regulatory filing on Monday and said the suspension of its vaccine would hit its finances. It added some regional disease control agencies had suspended some of its other vaccines.

The firm said it also faces the risk of being delisted due to an investigation by China's securities regulator into suspected violations of information disclosure.

Changsheng shares, which resumed trading on Monday afternoon session after being suspended in the morning, were down 10 percent. They have slumped 47 percent since mid-July. The wider CSI 300 healthcare index was down about 5 percent.

The Changsheng case is the latest in a slew of scandals that has plagued China's pharmaceutical industry in recent years.

A regulator in the northeastern province of Jilin, where Changsheng is based, revealed on Friday that the company had last year sold 252,600 substandard DPT vaccines to inoculate children against diphtheria, whooping cough and tetanus.

Another company Wuhan Institute of Biological Products was also implicated in the DPT vaccine issue. Earlier, in 2016, Chinese police busted a gang for selling around $90 million worth of illegal vaccines on the black market.